298 F.

2d 499

UNITED STATES of America, Appellee,

v.
Howard B. CHATHAM and his wife, Mrs. Howard B.
Chatham, Appellants.
No. 8469.

United States Court of Appeals Fourth Circuit.

Argued Jan. 10, 1962.
Decided Feb. 1, 1962.

C. E. Hyde, Murphy, N.C., for appellants.

William Medford, U.S. Atty., Waynesville, N.C., for appellee.
Before SOBELOFF, Chief Judge, and SOPER and HAYNSWORTH,
Circuit judges.
HAYNSWORTH, Circuit Judge.

Summary judgment was entered for the United States, condemnor of mountain
lands in Western North Carolina, against claimants to the land under a parallel
title. The District Court based its action upon the fact that Macon County, a
party to the condemnation proceedings for the purpose of setting up any claim
it had for the payment of previously assessed ad valorem taxes, subsequently
acquired the parallel title in tax foreclosure proceedings and then conveyed the
land to the present claimants. We think the fact that the defendants' grantor was
Macon County did not warrant the entry of summary judgment against them.

For incorporation in its Nantahala National Forest, the United States, in 1935,
undertook the condemnation of almost three thousand acres of mountainous
lands in Cherokee, Jacksoin and Macon Counties, North Carolina. Among these
lands, was a tract designated on the records of the Forest Service of the
Department of Agriculture as R. Y. McAden Tract No. 238-I. In the complaint
in this condemnation proceeding, Tract No. 238-I was said to contain 80.8 acres
and to have been owned by the R. Y. McAden Estate. The McAden heirs
answered, admitting their ownership of Tract No. 238-I.

An order of condemnation was filed in 1936. Later there was an order of

distribution of the money paid as just compensation for Tract No. 238-I.
Specific sums were diercted to be paid to two lienholders, not including Macon
County, and the remaining balance was directed to be paid to the McAden
heirs.

In the Southern Appalachians, it is not uncommon to find overlaps among

original grants of mountainous lands. Partial duplications were not always
readily apparent in the surveys, submitted by prospective grantees, upon which
the original grants were based. Since possession of the more rugged and
precipitous lands was usually quite nominal, except upon occasions of timber
harvests, it frequently happened that separate, parallel chains of title, each duly
recorded, stemmed from overlapping original grants. Such a situation underlies
this controversy.

By a deed dated in 1905, one William P. Head acquired record title to a tract of
land, said to contain 128 1/2 acres. A modern survey disclosed an overlap of 70
acres between this Head tract of 128 1/2 acres and the McAden Tract No. 238-I
of 80.8 acres. Apparently the Head and McAden titles were derived from
different original grants which were duplicating to the extent of the 70-acre
overlap. The defendants, hereD tacitly concede that the original grant from
which the record title of the McAdens was derived was the earlier of the two,
but they filed an affidavit of a grandson of William P. Head containing
statements which, if true, would support a conclusion that, at the time of
condemnation, the Heads, were the lawful owners than the McAdens, were the
lawful owners of the 70 acres in the overlap.1

None of the Heads, who claim to have been the lawful owners of the 70 acres
in dispute, were parties tod the condemnation proceedings.

The tract of 128 1/2 acres was listed for taxation in Macon County in the name
of the Heads. However, they failed to pay their taces for 1928 and subsequent
years. In 1942 Macon Cuonty filed an action against the Heads for the recovery
of these unpaid texes. It obtained a judgment, and the land was sold to satisfy
the judgment.2 Macon County was the purchaser at the sale.

In 1956, Macon County, by a quitclaim deed, conveyed the 128 1/2-acre tract to
the defendants. Thereafter, the defendants entered the land and cut the timber,
including that on the 70 acres in dispute.

In 1960, officials of the Forest Service having discovered what the defendants

had done, the United States brought this action seeking a decree which would
(1) quiet its title to the lands it claims, (2) enjoin the defendants from further
trespasses, and (3) require the defendants to pay the value of the timber they
had removed.
10

In granting summary judgment for the United States, the District Court did not
consider whether the condemnation proceedings were effective to vest in he
United States tile to the disputed lands good against the Heads. It held that,
because Macon Cuonty was at least a technical party to he condemnation
proceedings, it was estopped to claim the lands adversely to the United States.
It concluded that County's grantees acquired no greater right than their grantor
cuold enforce.

11

In that conclusion, we think he District Court carried the doctrine of estoppel

too far.

12

In the first place, if, as it assumed may have been the case, the Heads were the
lawful owners of the 70 acres after the condemnation proceedings and could
have excluded the United States from them, no reason appears why Macon
County could not have assessed its taxes upon this privately owned real estate
as it does all other real estate, privately owned, within its borders. If it could
assess its taxes, it could collect them and ersort to the regular and prescribed
remedies for the purpose. If the United States acquired no interest in the land
by its condemnation proceeding, it acquired no right to defeat Macon Cuonty's
scheme of taxation or her enforcement of her tax claims by acquisition of the
interest in the land of the lawful owners.

13

More importantly, however, application of the doctrine of estoppel does not

extinguish the assered right. The doctrine persupposes existence of he right, but
denies it judicial enforcement because the circumstances make judicial
enforcement inequitable. This is particularly true in real estate matters, where
the policy of the recording acts prevents the assertion of an equitable defense,
good against a predecessor in title, if the successor in title had no actual or
onstructive notice of the facts constituting the basis of the defense. If it be
thought inequitable to permit Macon County to assert a title adverse to the
United States, it could only be because Macon County was made a party to the
condemnation proceedings for the purpose of setting up any tax claim it might
have. That consideration is inapplicable to Macon County's grantees, these
defendants. They were not parties to the condemnation proceedings. There is
nothing to show they had any noticke of those proceedings. It does not appear
they had any reason to suspect that the United States had purported to condemn
these 70 acres as part of the lands of the McAdens. However carefully they

checked the title of their grantor in the public ercords, their search would not
disclose the claim of the Unied States, for the Heads were not parties to the
condemnation proceedings. The records of the condemnation proceedings, if
they had examined them, would have shown that Macon County claimed no
interest in these lands in the condemnaion proceeding, and it was not alleged
that it ever had claimed any interest in them except that of a taxing sovereign.
An examination of those records would disclose no basis for suspecting the
overlap between the McAden and Head lands.
14

The basis of a possible estoppel against Macon County is not present here
where the claim is asserted by these defendants. From what now appears, there
was nothing in the public records or in the nature of the possession of the
United States to give these defendants notice that the United States claimed an
interest in the land. If their predecessors in title, the Heads, were the lawful
owners of the land after the condemnation proceedings, nothing now appears
which would make it inequitable that these defendants should enforce the rights
which they acquired, through Macon County, from the Heads.

15

This situation is not comparable to that in which one subsequently acquires a

title he earlier had undertaken to convey by warranty deed. Macon County did
not purport to convey anything to the United States. It made no representation
in the condemnation proceeding except that it had no claim for taxes accrued,
prior to condemnation. If it be held to that representation, the equitableness of
enforcemen by these defendants of rights derived from the Heads is unaffected.

16

We conclude, therefore, that no estoppel preventing enforcement of the rights

of these defendants arose from the fact that, some years after the condemnation,
Macon County acquired the interest of the Heads in the land and thereafter
conveyed that interest to these defedants.

17

We conclude, therefore, that no which will be presented in the course of further

proceedings, particularly whether the Heads' title was good against the
McAdens, and, if so, whether they reained their interest in the land, rather than
a right to compensation, after the condemnation proceedings to which they
were not parties. Nor do we suggest, of course, that other facts may not be
established which, on equitable principles, may be disabling to the defense.

18

Since we conclude that summary judgment for the United States was
unwarranted, the judgment will be reversed and the cause remanded for further
proceedings.

19

Reversed and ermanded.

The affiant stated he was born in 1907 in his grandfather's home on the 128
1/2-acre tract. His grandfather lived there until his death and the widow and
grand-children continued to live there until 1934, when they leased the lands.
Their tenant, he said, was living on the place when the United States
condemned 70 acres of it as lands belonging to McAdens. The defendants claim
that the Heads were in actual, open and exclusive possession of all of the 128
1/2-acre tract, continuously from 1905 until sometime after these condemnation
proceedings. Such possession, if it existed, under color of their record title,
would have perfected the title of the Heads as against the McAdens

Macon County's tax judgment was for the unpaid taxes for the years 1928
through 1942. The condemnation was in 1936